Live And Die In Thailand
More and more retired Farangs come to Thailand, to stay here, until their life passes to a small notice in the Pattaya City News, accompanied by four pictures.
Is Thailand a low-price-paradise, where we can always live generously on our retirement payments? There are different views.
Consider just this. We have an annual inflation-rate in Thailand of around five percent. Retirement payments don't rise by a single cent in cold Europe where they have an aging population and overpaid workers pushed out of their jobs by globalisation.
Beside the inflation-index there are other gauges to measure the development of the economy. Most important is how market-conform businessmen act. By this you can detect trends that will develop in the future.
My first question: Is Thailand really a low-price country?
The last time I bought a bottle of wine in a supermercado in Spain – it was not really a bottle but a hard paper-box, they use for selling milk here – I paid just thirty baht (30), and the wine was drinkable, causing no headache. How much do we pay for a bottle of wine in Foodland? 300 baht or 600 baht? Just look.
The last time I stepped down into a mini-market in China, I bought three bottles of excellent beer, for which I paid only half the price they ask at Tesco-Lotus for "Elephant".
The last time I watched the sun setting down in the South China Sea, I gulped down a small bottle of beer with an Styrofoam cooler around its belly in an open air bar in Olongapo. How much did I pay for it? Fifteen Pesos. That is 15 baht. Or maybe even less, as the baht is stronger than the Peso.
Now this is my question: Why do I pay in Thailand for Elephant-Beer twice the price I pay for very good beer in China?
In the business world I see two concurring success models at work. One is to develop a market for the long run, the other to squeeze maximum profit out of a momentary favourable situation. This can make you a billionaire or kill your market.
The latter model I call the profit plus greed factor. Apparently the Thai beverage market is driven by the greed factor. But I am not sure if this is bad or good in itself. Some doctors say that you can enjoy living in Thailand longer, if you do not drink at all. So what?
The danger I see is that this business model could spread to other parts of the economy.
A new development I follow with interest is the creeping of the greed factor into the health care industry. When I stayed last year in a high end hospital in Pattaya, I had to pay a price that was three times as high as the bill written to Thai citizens. I nearly went bankrupt. The British Honorary Consul told Stickman that foreign health insurers were beginning to avoid helping their Farang customers or, as Kenyon said, "the insurer reneges, perhaps on a pre-existing condition or an exclusion clause." The reason for this might be that insurers had not calculated that prices could rise so high. Last year a friend from Asia came to Germany for surgery. He paid to the hospital the same amount a native had to pay as a private patient or client. Not a Satang more.
Now let us look at the reverse of the medal.
Thailand is a low-price country in three sectors:
Street food, Housing and Transportation. What are the reasons for this?
Street food is cheap because the majority of the people are poor. This will not change in the future. Reflect what the doctor in Contribution 2765 said: That Thailand is a country where "the rich do their best to keep the poor poor."
This is a phenomenon not restricted to Thailand.
Do you remember the song: "There is a war between the rich and the poor?" In fact this war was a sleeper when the song was written. But after the end of the Cold War it has gained momentum in favour of the rich, mainly in the leading country of the world, the USA. If you want to learn about the newest developments in this war, you must read the columns of Paul Krugman in the "International Herald Tribune", printed in Bangkok.
As long as the poor are losing this war worldwide, you will get cheap food in Thailand. I personally do not profit from this, because I do not eat street-food, I do not eat Thai food. I buy ingredients for international cooking at the friendship store.
Now to the biggest price-distortion in favour of us Farangs. That is the availability of beautiful housing (real estate) at top down prices. Such luxurious condos, as we find them half empty all the way on the beaches from Chonburi to Sattahip do not exist at all on the Philippines. You find some in Hainan, but at unbelievable high rising prices.
The reason for this anomaly is that in the 1990s real estate developers in Thailand could not control their greed factor, hoping they would earn astronomical profits, like investors in Hong Kong do. But they did not. They built much more than the market could swallow. This was the epicentre for the crash of 97. And it will still take time for the market to digest this.
It might be a good idea to buy a condo now. Some day will prices rise again. But I would buy it only from surplus savings which you can miss without pain, not by taking up a mortgage. Even if prices rise, you cannot be sure to sell at a profit, because you are a Farang. One Million baht gets you a seaside condo, 700,000 a so called townhouse in a settlement in the countryside. (All at the East coast).
If you are not able to drop a million baht without feeling pain, you probably should not live as a retiree in Thailand at all. It might be a good idea to return to the still available social security of your cold home country.
But be careful. When I first decided to settle down in Thailand in 1998, I was tempted to buy a nice bungalow at a ridiculous low price in Khao Lak. It stood in the cool shadow of rubber trees, and it was on sea-level, only a few steps from the beach. What saved me was that I had no tolerance for all the snakes, mosquitoes and naughty monkeys populating Khao Lak at that time. (It was before all those magnificent resorts with their high-class drowning rooms were raised).
Third point: Transportation. The love of motorcars is so high that you always will find some one who takes you on a discount ride, because he needs to pay for repairs. Only exception: Cyclo-taxis, which transport you on their backseat. Avoid them like hell and high water. The driver can be drunk, drugged or belong to a gang.
So: Is it worth for elder people to stay in Thailand until they close their eyes forever? I think living in Thailand is a wonderful experience, but you must calculate the risks. I predict the price of living will in the coming years rise to a level similar to that in the Canary Islands of Spain. Still many retirees from cold Europe manage to live there. Why not in Thailand?
Thailand might not be the cheapest option out there, but I still think it is hard to beat.